European and Asian markets made gains on Tuesday, with a Wall Street rally lifting sentiment worldwide.
“Whatever medicine the market took over the weekend it worked as after experiencing their worst week since October, global equity markets got February off to a strong start as concerns eased over the broader market impact of retail investors,” wrote Deutsche Bank analysts in a note.
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Tech stocks led gains on the Nasdaq (^IXIC), which surged 2.6% higher on its best day since early January ahead of Amazon and Alphabet earnings later on Tuesday.
“Confidence has returned to global equity markets with stocks in Europe higher again this morning after bouncing back on Monday from a choppy final week of January,” said Neil Wilson, chief markets analyst at Markets.com.
“We can probably put this down to bears lacking any serious catalyst, the combination of stimulus and vaccines still underpinning a broad confidence, and Chinese repo market stress from last week is fading.”
Deutsche Bank analysts added: “Amidst the broader equity rally, many of the Reddit-fuelled trades from last week lost ground yesterday.”
GameStop shed 30.8% as a co-ordinated retail investors’ squeeze on hedge funds’ short positions lost steam. Much of the focus has shifted to silver (SI=F), which jumped 7.7% on its strongest day since August on Monday.
Silver prices then plummeted, trading 5.9% lower as trading got underway in Europe. It came after the CME Group, which runs Comex, the main trading market for silver futures, hiked margins on contracts “to ensure adequate collateral coverage” amid the volatility.
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